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The Impact of Oil Price Shocks on National Income: Evidence from Azerbaijan

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  • Shahriyar Mukhtarov

    (Faculty of Economics and International Relations, Vistula University Stoklosy 3, 02-787 Warsaw, Poland
    Department of Economics, Baku Engineering University, Hasan Aliyev 120, Khirdalan, Baku AZ0101, Azerbaijan)

  • Sugra Humbatova

    (Department of Economics and Management, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1001, Azerbaijan
    Department of World Economy, Baku Engineering University, Hasan Aliyev 120, Khirdalan, Baku AZ0101, Azerbaijan)

  • Mubariz Mammadli

    (Department of Economy and Business Administration, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1001, Azerbaijan)

  • Natig Gadim‒Oglu Hajiyev

    (Department of Regulation of the Economy, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1001, Azerbaijan)

Abstract

This study investigates the influence of oil price shocks on GDP per capita, exchange rate, and total trade turnover in Azerbaijan using the Structural Vector Autoregressive (SVAR) method to data collected from 1992 to 2019. The estimation results of the SVAR method conclude that oil price shocks (rise in oil prices) affect GDP per capita and total trade turnover positively, whereas its influence on the exchange rate is negative in the case of Azerbaijan. According to results of this study, Azerbaijan and similar oil-exporting countries should reduce the dependence of GDP per capita, the exchange rate, and total trade turnover from oil resources and its prices in the global market. Therefore, these countries should attempt to the diversification of GDP per capita, the exchange rate, and other sources of total trade turnover.

Suggested Citation

  • Shahriyar Mukhtarov & Sugra Humbatova & Mubariz Mammadli & Natig Gadim‒Oglu Hajiyev, 2021. "The Impact of Oil Price Shocks on National Income: Evidence from Azerbaijan," Energies, MDPI, vol. 14(6), pages 1-11, March.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:6:p:1695-:d:519764
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